Financial Information

PART II

Item 8. Financial Statements and Supplementary Data.

MARRIOTT INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12. PROPERTY AND EQUIPMENT

The following table presents the composition of our property and equipment balances at year-end 2015 and 2014:

We record property and equipment at cost, including interest and real estate taxes we incur during development and construction. Interest we capitalized as a cost of property and equipment totaled $9 million in 2015, $33 million in 2014, and $31 million in 2013. We capitalize the cost of improvements that extend the useful life of property and equipment when we incur them. These capitalized costs may include structural costs, equipment, fixtures, floor, and wall coverings. We expense all repair and maintenance costs when we incur them. We compute depreciation using the straight-line method over the estimated useful lives of the assets (three to 40 years), and we amortize leasehold improvements over the shorter of the asset life or lease term. Our gross depreciation expense totaled $132 million in 2015, $135 million in 2014, and $107 million in 2013 (of which $58 million in 2015, $51 million in 2014, and $48 million in 2013 we included in reimbursed costs). Fixed assets attributed to operations located outside the United States were $229 million in 2015 and $291 million in 2014.

See Footnote No. 3, “Acquisitions and Dispositions” for information on impairment charges we recorded in the “Depreciation, amortization, and other” and “Gains and other income, net” captions of our Income Statements.